For SBA lenders
Short answer
Businesses are affiliated if they share common management, meaning one or more individuals control the day-to-day operations of both entities, regardless of ownership percentage.
Affiliation based on common management occurs when the same individual(s) manage or have the power to manage the operations of two or more entities. This can be through management agreements, common officers, or directors, even if there's no direct ownership link. This rule prevents businesses from structuring operations to circumvent size standards.
John Doe is the CEO of Company A (the applicant) and also the sole general partner responsible for day-to-day operations of Company B, a separate legal entity. Even if John owns less than 50% of Company B, Company A and Company B are affiliated due to common management.
13 CFR Part 121 - Small Business Size Regulations
Affiliation and Lending Criteria for SBA Business Loan Programs - Final Rule
SBA Table of Size Standards
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on affiliation & size
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day